* Up on Iran tensions, fears of Nigeria strike
* Kuwait to pump more next year
* Key events ahead include Fed meet, U.S. oil data
(Updates prices)
By Jane Merriman
LONDON, June 24 (Reuters) - Oil was below $138 a barrel on
Tuesday after an earlier advance in response to a rumoured
attack on Iran's nuclear facilities, which was denied.
"This is just a rumour. No attack against Iran's nuclear
facilities has taken place," a senior Iranian nuclear official
said. []
U.S. crude for August delivery <CLc1> was up 68 cents at
$137.42 a barrel by 1453 GMT, after settling up $1.38 on Monday.
It hit a record high of $139.89 on June 16. London Brent crude
<LCOc1> was up 73 cents at $136.64 a barrel.
Tension over Iran's nuclear programme has played a big part
in oil's rise to record levels near $140 a barrel.
The European Union this week imposed new sanctions on Iran,
including an asset freeze on its biggest bank.
Western powers suspect Iran, the world's fourth-biggest oil
exporter, wants to make nuclear arms, but Tehran denies this.
Friday's New York Times quoted U.S. officials as saying
Israel, which is believed to have nuclear weapons of its own,
had carried out a military exercise, apparently as a rehearsal
for a potential bombing of Iran's nuclear facilities.
Analysts are worried heightened tensions between Iran and
the West could threaten the Straits of Hormuz, a narrow waterway
separating Iran from the Arabian Peninsula through which roughly
40 percent of the world's traded oil flows.
NIGERIA TRUCE
United Nations official Ibrahim Gambari will seek a 90-day
truce with militants that have attacked oil facilities in the
oil-producing Niger Delta. []
Nigeria's senior oil workers union began a limited strike at
Chevron offices on Monday. The stoppage has not disrupted
production, but has added to concerns about further disruption
to supplies from the OPEC nation, where militant attacks shut
340,000 barrels of daily production last week. []
"The market is focusing on the immediate impact of this
Nigerian attack that reduced production," said Tony Nunan, risk
management executive at Tokyo-based Mitsubishi Corp.
Supply disruptions in Nigeria have helped push U.S. crude up
by more than 40 percent this year.
Kuwait, one of the few OPEC members with spare capacity,
will increase its oil output by 300,000 barrels per day starting
mid-2009, state news agency KUNA reported.
Kuwait's pledge follows a meeting of energy policy makers in
Jeddah at the weekend to discuss record prices, where Saudi
Arabia, the world's largest oil exporter, said it would pump
more oil.
The view of OPEC is still that there is no shortage of oil
and that record prices are due to other factors, including the
weak U.S. dollar and funds seeking new investment areas.
Chakib Khelil, president of the Organization of the
Petroleum Exporting Countries, said: "As far as fundamentals are
concerned I think we have equilibrium between supply and
demand." []
The dollar will remain in focus ahead of the U.S. Federal
Reserve's interest rate decision on Wednesday. The Fed is
expected to leave interest rates unchanged, which could be
bearish for the dollar and supportive for oil.
U.S. weekly data on crude oil inventories are also due on
Wednesday. Crude stocks are likely to have risen for the first
time in six weeks last week, as imports rose for the second week
in a row, a Reuters preliminary poll showed. []
The poll showed forecasts for a 200,000-barrel rise in crude
stocks last week, a 1.4 million-barrel gain in distillates and a
400,000-barrel rise in gasoline inventories.
(Editing by James Jukwey)
